AOL's Self-Fulfilling Prophesy?

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AOL's Self-Fulfilling Prophesy?

More hot gossip from Ned Brainard's poison pen.

Our sources in Bellevue, Washington, tell us that last week's announcement of a new partnership between CBS and Sportsline USA has only intensified discussions of an investment by Disney in Starwave, the company that, with its highly successful ESPNet Sportszone site and its upcoming ABC News service, is already the online vassal in the Mouse's empire. The sticking point in the negotiations is "control." The micromanagers at Michael Eisner's Disney want a majority of seats on Starwave's board. And should Disney actually convince Starwave owner Paul Allen that a takeover is in everybody's best interests, we've heard there could be several significant departures in the senior management team that now runs the company. Starwave, of course, won't comment on the Disney talks.

Friends who attended the Jupiter Online Conference in New York last week report that AOL Networks president Bob "I Want My MTV" Pittman told the luminaries during his keynote address that ad rates were headed down on the Net. Maybe Bob is just trying to justify the fact that America Online has had so much difficulty selling advertising on its service that it recently cut in half the rates it charges. As one influential media buyer recently remarked to a Flux informant in the investment community: "Advertisers do not especially like the AOL environment - [it's] cluttered, proprietary, and over-priced." These market watchers suggest that Pittman may have also been trying to drive down the ad rates collected by search-engine competitors, which would likely depress those competitors' stock prices to a more attractive level for a company considering an acquisition - a company like, just for argument's sake, AOL. The leading candidate is Excite - in which AOL already has a minority stake that includes a seat for former soap salesman Steve Case on the board of directors. Did we mention that Pittman was himself once a director of Excite?

It was reflexive Web-bashing time again last Friday for the editors at The New York Times, who seem to never fail in puffing up alarmist Web stories based on flimsy reporting into page-one shockers. "On the Web, New Threats Seen to the Young" the headline screamed, suggesting (not unintentionally, we're sure) that readers were about to be treated to yet another of the sort of badly reported and over-promoted opuses on Net pedophilia or cyberporn we've come to expect from the likes of The Times and Time magazine. Instead, it turned out that the article was really about a group of children's health advocates who believed liquor and tobacco advertisers were deliberately preying on kids online. Or were they? It's true that the crack investigative team at the Center for Media Education, the nonprofit group promoting this "study," managed to compile a list of liquor and tobacco advertising Web sites. But unfortunately for those interested in empirical evidence, it turned out that the center had merely inferred the influence of said sites on the under-21 crowd because, well, some of them had games. "They have created Web sites that are really more like playgrounds," a spokeswoman said ominously. Unfortunately, the CME apparently didn't bother to measure how many children actually visit the sites, let alone whether they had been influenced by them. Maybe that's why the competition down at The Wall Street Journal chose to bury their story about the study deep in the second section. Haven't Times editors been reading their Jon Katz?